In Massachusetts, lobster is about as local a food as you can hope to find. These days, it’s also likely to be on the menu in Beijing and Shanghai. China has become a major lobster importer.
But one year into the U.S. trade war with China, U.S. lobster sales to China are down, and coastal communities — including Gloucester — are feeling the pinch.
Vince Mortillaro, who runs a lobster wholesale company in Gloucester, has worked over the last decade to capitalize on the demand for lobster from China, developing systems that enable him to ship fresh lobster from Gloucester to China in 36 hours and spending $3 million to build a new dock and warehouse to hold extra product.
The payoff was enormous: a 30 to 40 percent jump in business.
Then the trade war began, and lobster, like soybeans and steel, was caught in the cross hairs. In response to U.S. tariff increases on Chinese goods in July 2018, China raised tariffs on U.S. imports — including lobster. It now costs Chinese companies an extra 25 percent to buy lobsters from the U.S.
“We’re down over $6 million in sales,” said Mortillaro. “Over a million dollars a month.”
But China is still importing plenty of lobster — now, from Mortillaro’s competitors in Canada. In the wake of raising U.S. lobster tariffs, China lowered tariffs on Canadian lobsters to 7 percent.
Since 2017, U.S. lobster exports to China have dropped 70 percent. Meanwhile, they’re up 50 percent from Canada.
State Rep. Ann-Margaret Ferrante hopes to make the case that local businesses deserve federal relief. She said two other lobster wholesale companies have shut down.
“I’m really fearful that we’re at that critical point right now where we could see many other businesses follow suit,” said Ferrante.
Much in the way farmers in the Midwest hit hard by tariffs received federal aid, she is advocating for lobster businesses to receive help. She’s asked the legislature’s export committee to hold a hearing to quantify exactly how much tariffs have cost this community.
“There are negotiators trying to resolve these trade disputes, and we really need to make a case why Gloucester should be a priority,” Ferrante said. “We really want to provide the commonwealth with the info to lobby the federal government.”
The legislature is expected to hold a hearing on the impact of lobster tariffs in September. U.S. Rep. Seth Moulton has filed federal legislation seeking monetary relief for fisheries impacted by tariffs.
Gloucester’s harbor, Ferrante said, is a tightly connected ecosystem, and when one sector of the fishing economy is hurt, it impacts the others. But, at least so far, not everyone’s feeling the pinch.
“The fishermen, luckily, haven’t felt it yet,” said lobsterman Mark Ring, who also serves as chair of the Gloucester Fisheries Commission.
In a kind of quirk of the global economy, lobsters caught in Gloucester still end up on dinner plates in China. Fishermen like Ring can, and do, sell their catch to Canadian exporters. But long term, Ring said fewer local wholesale companies mean less competition.
“If there were 20 million pounds of lobster going from Maine and Massachusetts to China two years ago and now none are going from Massachusetts, Canada’s cornered the market. They now know they’re buying those lobsters from us and we have to get rid of them,” said Ring. “As soon as the price gets depressed, that’s when we see it.”
Like just about everyone else in this town, he hopes the lobster tariffs disappear. But even if that happens, he pointed out that there’s no guarantee Chinese businesses, which are now used to buying lobster from Canada, will ever return to Gloucester.
